Financial Planning Steps to Take Before Retirement

The decade leading up to your retirement is one of the most critical periods for retirement planning. There are a number of financial planning issues to consider during this time period to help ensure a financially secure retirement.

1. Prepare a retirement spending plan

This is the time to take a hard look at how you plan to spend your time in retirement and how much your desired retirement lifestyle will cost. This can encompass a lot of things including your housing. Will you stay in your current house or perhaps downsize? Will you relocate to another part of the country? 

You should also consider the types of activities you will be doing in retirement. Perhaps you will be doing a lot of traveling. This is the time to look at what you think you will be spending in retirement and to equate that to a monthly spending budget. 

2. Focus on Safety, as well as a reasonable rate of return over time

You might think this step is easier said than done with the state of the stock market these days, but believe it or not, there are investment options that protect the investor’s principal during market declines and offer a reasonable rate of return during market upswings. Summerlin Benefits Consulting specializes in “safe money strategies”, and we help our clients maintain safety of their existing nest eggs while still achieving growth over the rest of their lifetime. 

3. Review your Social Security record

This is an ideal time to review your Social Security earnings record. It’s important to ensure that it is accurate and that nothing is omitted. The top 35 years of your earnings record are used in the calculation of your benefit. If you have less than 35 years’ worth of earnings then those missing years are added in as zero earnings, reducing your benefits.

The next 10 years’ worth of earnings will likely help increase your benefit levels. This is also a good time to begin thinking about when you will claim your Social Security benefit.

4. Plan for your retirement healthcare needs

One of the biggest expenses for retirees is the cost of healthcare. In their most recent estimate, Fidelity Investments indicated that a couple aged 65 in 2022 will need $315,000 to cover their healthcare costs in retirement. This does not include long-term care costs.


For most people Medicare will be their prime source of healthcare coverage in retirement. As you get closer to Medicare eligibility it is important to learn all that you can about how the various parts work.

While you are working, consider contributing to a health savings account (HSA) if you have access to one. These are medical savings accounts associated with a high deductible health insurance plan. Contributions to an HSA are made on a pretax basis, meaning earnings on the money grows tax-free. Withdrawals for qualified medical expenses are tax-free as well.

The beauty of an HSA for retirement is that the money in the account can be carried over from year-to-year if the money is not used. Money in the account can often be invested. The money can be used in retirement to cover the cost of Medicare premiums, any deductibles and a host of other healthcare expenses in retirement.

5. Inventory all sources of retirement income

It’s important to get a handle on all potential sources of retirement income before retirement. These may vary somewhat based on your individual situation. The list often includes IRAs, pensions, social security, real estate holdings, and annuities, just to name a few.

With annuities specifically, it’s a good idea to have a financial professional help you analyze the policy you have in force in order to clarify exactly what the income benefits are and how they will pay throughout retirement.  Some annuities only offer a shorter periods that might not be long enough if you have longevity on your side. Some annuities have hidden fees, which can eat away at your earnings and future income availability.

Summerlin Benefits Consulting specializes in this field and can help you ensure you have the right annuity for you to achieve your income goals during retirement.  When set up correctly, your annuity will serve as a good supplement to other sources of lifetime income, like social security and pensions.

6. Run retirement projections

As you calculate your retirement spending and review all of the resources that could be turned into income during retirement, this is a good time to begin running some retirement projections to see where you stand. There are a number of online retirement calculators that will let you run projections to see if your various sources of retirement income are enough to support your projected level of spending for your life expectancy.

If the projection indicates that the likelihood of outliving your retirement assets is low, that’s great. If the outcome is unfavorable, then it’s time to rethink your retirement planning a bit. Perhaps you will need to consider engaging the services of a financial professional, such as Summerlin Benefits Consulting, to help with this stage of your retirement planning.

This projection should be run at least annually as you approach retirement and begin to enter retirement. Things can change over time, and you want to stay on top of the potential impact on your retirement. If the results come up as unfavorable you may still have time to make some adjustments in your retirement planning strategy or consult your financial professional.

7. Formulate a retirement withdrawal strategy

As you head into retirement, it’s important to take all of the information you’ve gleaned from the steps outlined above to formulate an initial withdrawal strategy to fund your retirement spending needs. Which accounts will be tapped first? Your withdrawal strategy will depend upon a number of things including your tax situation, whether or not you have reached age 59 ½, and when you decide to claim Social Security.

Your retirement withdrawal strategy will evolve over time as you move through retirement and it’s important to revisit your withdrawal strategy on a regular basis in retirement. This is also something that your financial professional can assist with.
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The decade leading up to retirement is prime time to get your planning in order as you move into retirement. But, if you are on the brink of retirement and are only in the beginning stages of your planning, do not fret. Summerlin Benefits Consulting helps clients through every step of their financial path leading up to and during retirement.  Give us a call today and we can help you find the path that is right for you!